Inflation, property, pub companies, Disney, Yum, Uber & other:

A DAY IN THE LIFE:

Bit rushed this morning after a series of meetings and a trip to deepest E1 to test out some local hostelries and the unlisted restaurant operators down there. On to the news:

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PUBS & RESTAURANTS:

Inflation

There has been some discussion as to whether this is transient, as the Bank of England’s Andrew Bailey had earlier suggested, or not. Inflation will continue as long as each successive player in the economy (workers, businesses or government) give the wheel another spin. The British Chambers of Commerce reports that ‘73% of firms in a new survey say they are raising prices in response to rising costs’. This does sound as though it will have consequences.

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Meanwhile, the Bank of England’s chief economist Huw Pill has said that so-called “second round” effects – that is workers asking for pay rises to compensate them for inflationary cost increases – may be contained. If they are not, he says that “further monetary policy response would be required”.

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Property issues.

Trade bodies the British Beer and Pub Association, the British Institute of Innkeeping and UKHospitality, have produced guidance for the management of pub repairs and dilapidations saying that the update has been developed to support both pub companies and their tenants, ‘with the aim of minimising the scale and frequency of any disputes and thereby benefiting both parties’.

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Housing costs, consumer squeeze.

The cost of renting has risen at the fastest rate since the financial crisis, with tenants now having to spend an extra £750 per year on housing. Average rents climbed by more than 8% year-on-year in the final weeks of 2021, with average monthly payments reaching a new high of £969.

COMPANY & OTHER NEWS:

Wells & Co has reported full year numbers to 3 Oct 2021 and said that revenue fell by £8m to £30.5m to give EBITDA of £5m and cutting debt by £1m.

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YUM Brands has reported Q4 numbers saying that sales were up by 9% in the quarter to over $6bn with EPS of 111c, up 3%. The group CEO, David Gibbs, says that ‘we opened an astounding 4,180 gross units in 2021, marking the strongest growth year in Yum’s history and setting a restaurant industry record for unit development.’

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Star Pubs & Bars has told the MA that confidence is steadily growing week by week. MD Lawson Mountstevens says ‘if you look at the December, [we were] sort of closed down by stealth into January, [this was] hugely challenging and if we were having this conversation three weeks ago, I would have said we’re looking at a very challenging outlook.’ The company says ‘recruitment levels and applications for pubs look pretty strong. And our capex programme is motoring along – slightly delayed but coming along.’

Chipotle, which announced numbers earlier in the week, has raised menu prices by around 10% on 2020 levels. Footfall remains harder to drive.

Website So Glos reports that the Lucky Onion Group will sell part of its pub and hotel portfolio to Young’s. A Young’s spokesperson said the group was acquiring pubs and hotels in the Cotswolds region.

LEISURE TRAVEL & HOTELS:

The Telegraph reports that France is set to drop the requirement for vaccinated travellers from outside the EU to have a negative Covid test before arrival. To be recognised as fully jabbed, anyone aged 18 or over should have had their primary full vaccination course within the past nine months or a Covid-19 booster.  

Fred Olsen Cruise Lines reports sales have returned to pre-pandemic levels, driven by a ‘bumper’ January. Last minute bookings for late winter and early spring are proving particularly popular.

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Uber Technologies yesterday announced its first profit as it reported Q4 and full year numbers for 2021. The company says that it recorded Gross Bookings of $25.9 billion in the quarter, up 51% year-over-year and at the high end of the guidance range. The company had net income of $892 million. This included a $1.4 billion net benefit on investments. Uber reported adjusted EBITDA of $86 million, ahead of earlier guidance.

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Disney yesterday reported December quarter numbers ahead of expectations. It reported strong Disney+ subscriber growth and better than expected attendance at US theme parks. CEO Bob Chapek said that the company believed home hits like “The Mandalorian” and “Black Widow” have cemented growth in place. He believes Disney+ will have 230 million to 260 million subscribers by 2024. The company added 11.8 million Disney+ subscribers in Q1. Overall revenue rose 34% to $21.82 billion in the quarter, ahead of estimates of $20.91 billion. EPS was $1.06 per share, ahead of estimates of 63 cents.

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Safestay has announced the appointment of Paul Hingston, who will join the company as Designate Chief Financial Officer and Company Secretary. He is expected to join the board by 21 February 2022. The co also announces the appointment of Nexia Smith and Williamson Audit Ltd as its new auditor replacing Grant Thornton LLP who have resigned.

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Norwegian Cruise Lines is predicting a return to adjusted profit in the second half of 2022 after its full fleet returns to service early in Q2. The company is currently operating 16 of its 28 ships, 70% of its capacity.

Aprirose has acquired Selsdon Park Hotel in Sanderstead, Surrey from De Vere Hotels for an undisclosed price.

NCL is to drop requirements for passengers to wear face masks on its sailings from US ports on 1 March.

NCL is to drop requirements for passengers to wear face masks on its sailings from US ports on 1 March.

OTHER LEISURE:

Meta has warned that it might have to shut down Facebook and Instagram in Europe as the company could soon find itself unable to transfer data between Europe and the US. It noted that its operations are particularly subject to regulations on how data can be transferred or processed between different countries and regions, as well as different products.

Domestic tourism company, Lovetovisit.com, aims to raise £400k on crowdfunding platform Seedrs.

FINANCE & MARKETS:

A report from the Public Accounts Committee (PAC), said it ‘was clear’ that leaving the EU was having an impact on UK trade volumes. It also warned things could worsen this year as new import controls come in. The PAC also said it was concerned about what will happen when passenger traffic across the UK border returns to normal levels as the pandemic subsides.

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The BCC has commented on the above saying ‘this Report reflects the lived experiences on EU trade that more than a thousand small and medium-sized firms have shared with the BCC over the past six months.’

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Sterling weaker at $1.3531 and €1.1842. Oil price up at $91.21. UK 10yr gilt yield down 7bps at 1.43%. World markets better yesterday. London set to open up around 6pts as at 7am.

RETAIL WITH NICK BUBB:

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